MIN (ASX) Ann: FY23 Q4 Quarterly Activities Report

Originally posted by sabine: ↑

https://thewest.com.au/business/min...ts-guidance-after-lacklustre-year--c-11388481

Total rubbish’: Chris Ellison hits out at concerns over Mineral Resources’ changed lithium strategy
Sean Smith and Daniel NewellThe West Australian
Wed, 26 July 2023 1:15PM

MinRes boss Chris Ellison Credit: MinRes Courtney McAllister

Chris Ellison has rubbished analysts’ concerns about Mineral Resources’ revamped lithium strategy, claiming negative and ill-formed commentary was damaging the company’s battery metals ambitions.

In a combative and typically blunt call with analysts on Wednesday, the MinRes founder and chief executive variously described some of the research commentary as “total rubbish” and “horses--t” and suggested the sceptics were underestimating the group.

MinRes last week surprised investors by scrapping a $1 billion deal announced five months ago to buy stakes in two lithium hydroxide plants in China from US group Albemarle.

Some of the analyst reaction to the about face has clearly irked Mr Ellison, who met the subsequent commentary head on during a lengthy call scheduled to talk about MinRes’ June quarter production results.
“I’ve saved over a billion dollars of cash going into China,” Mr Ellison told listeners.
“And so, get your head around this and do this in your spreadsheet: my sales will go up, my bottom line will be more.
“And what do you think I’m going to do with that capital that I’ve saved? I’m going to go and put it somewhere where I’m going to get a 25 per cent return plus.”

Mr Ellison also ridiculed Goldman Sachs’ bearish price forecasts for lithium, saying that the investment bank had consistently got pricing wrong by underestimating demand for lithium in the past three years.
“If anyone wants to bet their house on Goldman, they’re going to be a winner,” he said.

MinRes will continue to send lithium concentrate to China for processing.
However, it appears to have pulled out of the Albemarle deal because of comparatively high projected operating costs for the Chinese lithium plants and its belief that China now carries a higher investment risk, particularly in the relation to the US Inflation Reduction Act prioritising supplies of critical minerals from friendly countries.

In an unusual move for a company doing business in China, Mr Ellison partly referenced the decision in the context of China’s past trading bans.
“When Australia is trading with China and Australia doesn’t go along with some of the social decisions that are made in China, then they go and ban our coal, they ban our wine … they ban a whole bunch of stuff,” he said.
“The risk for Australians in China is high, and we don’t want to trap money in China.”

Mr Ellison also revealed MinRes has cooled on the idea of building a lithium hydroxide plant in Australia, because of the high development costs, and is instead looking at some intermediate processing onsite in WA to produce a lithium carbonate product.
“Our intention is to send that directly into Europe and the US, we’re well advanced in discussions around that,” he said.
“And we want to have long term contracts directly with the OEMs (original equipment manufacturers), and we are advanced in those discussions.”

The MinRes call revealed the group had hit gas again with its Lockyer-3 well in the Perth Basin, supporting advancing plans by the company to build a plant to tap energy for its WA operations and third parties.
“We wanted to be self sufficient and be able to control our energy costs for the next 20 or 30 years,” Mr Ellison said.
“We’ve done that in spades, but we’ve now got a lot of gas. So we’ll be building a plant up there, and we’ve already started a study on it.

“We’ve got external engineering engaged, we pretty much know what size we want to build. And we’re going to get that underway, (the study) will probably come out towards the end of this calendar year.”

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A current reflection -expressed - Page 17- AUSTRALIAN

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(20min delay)
Last $55.33		Change 1.670(3.11%)		Mkt cap ! $10.87B

Open	High	Low	Value	Volume
$54.07	$55.70	$53.43	$43.73M	792.8K

Ann: FY23 Q4 Quarterly Activities Report, page-21

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